Digital Publishing:new business models, new legal issues. :: Laurence Kaye

‘New business models, new legal issues’

London Book Fair

April 12th 2011

Laurie Kaye & Mailin Bala

Laurence Kaye Solicitors

Laurence Kaye Solicitors LBF. 12.04.11

Agenda

1. ‘Digital Shift’

2. Legal landscape in publishing

3. Successful digital projects

4. Top 10 Points

‘Digital Shift’

Laurence Kaye Solicitors LBF. 12.04.11

‘Digital Shift’

Analogue / Pre-Internet

TransitionalPeriod

NetworkedDigitalSociety

1980’s? 2020?2011?

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‘Digital Shift’

Law

Technology

Business Models

“Social norms”

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‘Digital Shift’

Tech Law

Biz Models

Social Norms

Creative sector, represents some 8.2% of the UK economy

Employs 2.28m people in the UK

The publishing sector is a major UK strength, worth £22bn

Exports more than any other media sector

Book publishing alone reported exports of £1.2bn in 2009

That export market depends critically on copyright.

Laurence Kaye Solicitors LBF. 12.04.11

‘Digital Shift’

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‘Digital Shift’

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DPF: “Hot Legal Issues”Big Themes

’

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‘Digital Shift’

‘Work’

Enhanced Edition

Book

E-book

App

‘Digital Shift’

Author

Publisher

Developer

Distributor

Community

Search

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Laurence Kaye Solicitors LBF. 12.04.11

“The copyright system will never work on the Internet” Professor Lawrence Lessig (Nov 2011)

v.

“Let’s innovatively adapt”

Legal landscape

Laurence Kaye Solicitors LBF. 12.04.11

DPF: “Hot Legal Issues”Digital Rights

Copy

‘1 to 1’ – making available on demand on the internet

‘1 to many’ – comm to the public

Laurence Kaye Solicitors LBF. 12.04.11

While the digitization of books and the creation of a universal digital library would benefit many, the ASA would go too far. It would permit this class action – which was brought against Google to challenge its scanning of books and display of “snippets” for on-line searching – to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners. Indeed, the ASA would give Google significant advantages over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in this case”

Judge Denny Chin

Legal landscape

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DPF: “Hot Legal Issues”Digital shift

Amended Google Settlement

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“Many of the concerns would be ameliorated in the ASA was converted from an “opt-out” settlement to an “opt-in settlement”

Judge Denny Chin

Legal landscape

Laurence Kaye Solicitors LBF. 12.04.11

Hargreaves Review

• No.10 initiative – seeking hard evidence • “obstructing growth?” – barriers to new internet-based business

models (including permissions) • Cost and complexity of enforcing IP rights – UK and abroad • Interaction between IP and Competition frameworks

• Cost and complexity for SMEs

Legal landscape

Laurence Kaye Solicitors LBF. 12.04.11

Gowers: o/s exceptions to copyright• Gowers 2006 and ‘Taking Forward’ 2008 • Dropped: personal copying, research and private study, parody • 2 left: ss. 35/6 – education via distance learning (nb licensing

proviso) • Libraries and archives: s42 – copying for preservation and archiving

to be extended to sound recordings, films etc

Legal landscape

Laurence Kaye Solicitors LBF. 12.04.11

The International agenda 2011: EU

• WIPO – copyright exceptions? • Treaty (or Stakeholder forum) on VIPs? • EU – Impact Assessment on Orphan Works • ‘Out of Commerce’ – Stakeholder Forum • Framework Directive on Collective Management

Legal landscape

Laurence Kaye Solicitors LBF. 12.04.11

Simplicity

Transparency

Ease of use

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What are the top 5 issues to focus on in contract?

:

• The Licence

• What about the technology?

• It’s a commercial term!

• New IP?

• Plan for exit…

Laurence Kaye Solicitors LBF. 12.04.11

The Licence (permission to use the work)

:

• Exclusive or non-exclusive?

• Territory?• off line• on line

• Delivery?• What medium?• What platform?

• Permitted acts?• Is it sub-licensable?

Laurence Kaye Solicitors LBF. 12.04.11

What about the technology?

:

• Understand the process

• Think about the related issues e.g.

Enhancements

Bug Fixes

Backups

Access to source code

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Don’t mistake a commercial term for a legal term

:

E.g. exclusion and/or limitation of liability clauses

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Any new IP?

:

• Who is the owner?

• Include an assignment

Laurence Kaye Solicitors LBF. 12.04.11

Plan for the exit?

:

• What are the rights of termination

• What is the effect of termination? What happens to content on

termination? Revenues Any other provisions to continue post

termination? (e.g. audit, access to licensee’s proprietary code)

Laurence Kaye Solicitors LBF. 12.04.11

What are the top 5 mistakes in a contract negotiation?

:

1. Don’t start work before the contract has been negotiated.

2. Don’t negotiate the commercials in tandem with the legal negotiation of the contract

3. Remember to consider the presentation and tone of your contract

4. Don’t reinvent the wheel

5. Involve your lawyer early

Laurence Kaye Solicitors LBF. 12.04.11

Starting work before the contract has been negotiated

:

• Exposure if things go wrong

• Solution: agree one page term sheet

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Negotiating the commercials in tandem with the drafting of the contract

:

• Negotiate commercials first

Laurence Kaye Solicitors LBF. 12.04.11

Consider the presentation and tone of your contract

:

• Plain English

• User friendly format

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Don’t reinvent the wheel

:

• Working with what you’re given = speedier resolution

Laurence Kaye Solicitors LBF. 12.04.11

Involve your lawyer early

:

• Ask them to identify:

Key issues

Ways in which you can manage

your risk

Laurence Kaye Solicitors

10 PRINCIPLES OF DIGITAL MEDIA LAW

• There’s always a solution• Online rules = offline rules (mostly)• Living with uncertainty, so manage your risk• Value your IP• Copyright: permissions first, restrictions last• Think privacy• Collaboration’s the name of the digital media game• Make it simple(r)• Do the deal but allow for the exit• What are the things you don’t know you don’t know?

Laurence Kaye is an expert lawyer in the fields of digital law, intellectual property and media law. He is recognised in “Chambers Guide to the UK Legal Profession, 2011” as a leader in the fields of Media Entertainment & Information Technology law.Laurence was one of the first lawyers in the UK to advise on Internet law. He combines cutting-edge legal work on digital media projects with strategic and policy-related work in the field of copyright and online law. He is Copyright Adviser to the European Publishers Council for whom he has worked closely on a number of key EU Directives, including the Copyright, Database and E-Commerce Directives, and on many copyright strategy papers.

Laurence also served as a member of the Copyright Expert Panel from 2008-10 which advised UK Strategic Advisory Board for Intellectual Property Policy (SABIP.

Laurence founded Laurence Kaye Solicitors in 2002. The firm’s mantra is “legal solutions for the digital age”, with a proven track record for combining innovation with practical legal advice.Laurie is also a regular blogger at ‘Laurence Kaye on Digital Media Law’.

Contact details:laurie@laurencekaye.com